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in Del Mar, CA
Self-employed borrowers in Del Mar have two solid paths to approval without tax returns. Bank statement loans use 12-24 months of deposits to calculate income. P&L loans rely on a CPA-prepared profit and loss statement instead.
Both are non-QM programs built for business owners and contractors who write off most of their income. The right choice depends on how clean your bank statements are and whether you work with a CPA already.
Bank statement loans calculate income from deposits over 12 or 24 months. Lenders apply an expense ratio (typically 25-50%) to your total deposits to arrive at qualifying income. Most borrowers need consecutive statements from the same account.
This works well if you run clean business deposits through one or two accounts. Mixed personal and business transactions can lower your qualifying income since lenders count everything. Rates typically run 1-2% above conventional loans.
P&L statement loans require a CPA-prepared profit and loss document covering 12-24 months. Some lenders also want a business license and year-to-date P&L. The CPA must be licensed and independent (not your relative).
This path works if your business has formal accounting already. The P&L shows net profit after expenses, which becomes your qualifying income. Rates run similar to bank statement loans. Approval hinges on how the CPA presents your numbers.
Documentation separates these programs. Bank statement loans pull straight from your deposits—what hits the account is what counts. P&L loans rely on how your CPA categorizes income and expenses. Bank statements give you more control but require organized banking.
Qualifying income calculations differ too. Bank statements multiply deposits by an expense factor. P&L loans use bottom-line profit. If you have high deposits but also high expenses, bank statements might qualify you for more. If your books show strong net profit, the P&L route could work better.
Choose bank statements if you don't work with a CPA regularly or run a cash-heavy business with consistent deposits. This works for contractors, real estate agents, and small operators who keep business and personal accounts mostly separate. You need 12-24 months of clean statements ready to submit.
Go with P&L if you already pay a CPA to maintain your books. This fits established businesses with formal accounting, multiple revenue streams, or complex expense structures. The CPA's presentation matters—make sure they understand mortgage underwriting before they prepare the statement.
Yes, if business income flows through personal accounts. Lenders just apply a higher expense ratio since personal and business expenses mix together.
Your CPA must be state-licensed and independent. They can't be a family member or have ownership in your business.
Rates run similar on both—typically 1-2% above conventional. Your credit score and down payment matter more than which doc type you choose.
Most lenders allow this if you provide docs within their timeline. Switching adds time to underwriting though.
Most lenders want 12 or 24 months consecutive. Longer history sometimes qualifies you for better terms.